Fiber broadband provider Converge ICT has received a $250-million or P12.8-billion investment from Warburg Pincus, a private equity firm based in the United States.
Converge ICT said it will earmark the investment on rolling out more fiber connections nationwide.
“Since going full throttle with our fiber network roll-out and package offerings, the change in overall Philippine performance has been noticeable,” said Dennis Uy, founder and president of Converge ICT. “In 2018, the average connection has risen to 18Mbps. We don’t take full credit but the company’s contributions have been undeniable.”
This is the Warburg Pincus’ first investment in the Philippines. One of the world’s biggest equity firms has $20 billion invested in Asia and about $65 billion in assets under management.
“We are excited about the country’s young, digital-savvy population and its thriving services industries, which have created an outsized need for connectivity and will create explosive growth in the broadband space,” said Saurabh Agarwal, managing director of Warburg Pincus.
“Converge ICT is a remarkable business and growth story and I am confident that it will continue to achieve significant growth milestones and solve the ever-increasing connectivity needs of the country.”
Converge ICT said it is looking at capturing 30% of the country’s broadband market in the next few years. With this investment, Converge ICT said it will be able to fastrack the construction of its $1.8-billion nationwide Internet backbone.
The current rollout includes a $70-million domestic submarine cable with 20 landing stations across the Philippines. The Luzon backbone is expected to be completed by the first quarter of 2020.
“Converge ICT is the only pure end-to-end fiber internet provider in the country with all-in house capabilities,” said Uy. “We have been investing heavily on innovations that would move the broadband market forward so we can be on par with our neighbors. We have rolled out 400Gbps per channel in the past.”
At present, Converge ICT is looking at doubling its half-a-million subscribers by next year. Seventy percent of the company’s customer base is first-time fixed broadband service users and Uy plans to increase that with more expansions in the coming months.